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Sustainable Value CreationMon, 22 Jan 2018 21:04:35 +0000en-UShourly1https://wordpress.org/?v=4.9.4Strategic Planning – What Is The Competition Up To?https://navigareadvisorypartners.com/nap-blog/2017/09/strategic-planning-competition
Thu, 21 Sep 2017 12:44:53 +0000http://navigare.wpengine.com/?p=932Understanding your competitors — both direct and indirect — gives you insights necessary to gain market share and improve visibility into likely future market shifts. Building a competitive analysis is also an excellent way to engage your employees in a meaningful way and get them thinking beyond your organization. In business, competition is never as […]

]]>Understanding your competitors — both direct and indirect — gives you insights necessary to gain market share and improve visibility into likely future market shifts. Building a competitive analysis is also an excellent way to engage your employees in a meaningful way and get them thinking beyond your organization.

In business, competition is never as healthy as total domination.

Peter Lynch

Widely seen as one of the great investors of our time, Peter Lynch ran Fidelity’s Magellan Fund from 1977 to 1990, posting an average return of 29 percent and beating the S&P 500 11 of 13 years. His quote about competition sets the stage for looking at building a competitive review as a step toward building a plan to dominate your marketplace.

Who are your competitors, what are they doing, and how should you respond to their moves? Developing a complete understanding of your competitors helps you identify what you need to do to dominate your marketplace and, importantly, helps you identify open spaces where you can operate with limited or no competition.

Middle-market companies are particularly vulnerable to competitive pressure. As a middle-market player, you are likely to lack the revenue diversification needed to survive a competitive attack on your position. You are also far less likely to have the resources needed to stay on top of the competition and are typically so focused on just running your business day to day that staying abreast of the competition feels like a luxury you can’t afford. Because of these factors, you are vulnerable to external threats that can threaten your enterprise. Get ahead of that by focusing on your competitors in a structured and ongoing way. It’s time well invested.

One of the tactics I’ve found very productive is to engage employees across your organization in the exercise. Assign staff members a competitor to monitor. Give them a framework for monitoring competitor activity, and hold periodic review sessions. It’s a great way to get multiple people in your company engaged in thinking strategically and focused outside the four walls of your office.

Whom to look at?

Clearly you need to assess your direct competition. What companies provide similar products or services to your customers? If you operate in a big industry with plenty of competitors, apply the 80/20 rule and focus on the biggest ones to make the project scope manageable.

But don’t just look at direct competitors; the indirect set is sometimes more important and often more illuminating. Who out there may be poised to disrupt your market? What other products and services are competing for the same share of customer wallets? As an example, if you ran a record label, your direct competitors are the other labels. You certainly want to know what they are up to, but you should also be tracking streaming services and other entertainment outlets that soak up your customers’ discretionary entertainment dollars.

What information should you gather?

For each competitor, gather data focused on:

marketing channels, messages and tactics

products and services offered

pricing

strengths and weaknesses

key brand differentiators

How do you gather it?

In today’s ubiquitous information world, it’s hard to keep anything secret, and source materials are abundant. One of the best ways to gather information is to talk to your sales reps and your customers. They will have a good idea about what your competition is up to. Additionally, use these sources to gather information:

advertising

product Samples

sales literature

articles — blogs, magazines, and newspapers

annual reports

trade associations

What will you learn?

One of the best outcomes of a competitive review is coming away with a rich understanding of how you stack up against the very people you are battling for market share. You will start to build an early warning system so that you aren’t caught off guard by moves your competitors make; you can develop effective countermeasures to help you keep your share. You will also better understand your real competitive advantages, allowing you to exploit competitor weaknesses to your advantage.

A structured competitive review is a key part of building your strategic plan and a great way to engage your employees in a valuable exercise. If you need help getting started, reach out to us and we’ll help you down the road to Capture Your Future.

Capture Your Future is a series of articles bringing you practical insights gleaned from over 20 years of building strategic plans for divisions of big public companies, medium-size privately held companies, and nonprofit organizations. Along the way we’ll share some lessons we’ve learned from doing the right things, and sometimes the wrong things, in building good strategic plans.

]]>Strategic Planning – Where Do We Compete?https://navigareadvisorypartners.com/nap-blog/2017/08/strategic-planning-where-do-we-compete
Tue, 15 Aug 2017 02:23:34 +0000http://navigare.wpengine.com/?p=902Choosing where to compete, and importantly where not to compete, is a core step in building a robust strategy for your organization. Limiting your playing field feels instinctively wrong – shouldn’t you try to appeal to the broadest audience possible? – but trying to be everything to everyone by not making tough choices inevitably leads […]

]]>Choosing where to compete, and importantly where not to compete, is a core step in building a robust strategy for your organization. Limiting your playing field feels instinctively wrong – shouldn’t you try to appeal to the broadest audience possible? – but trying to be everything to everyone by not making tough choices inevitably leads to underserving everyone.

“If you chase two rabbits, both will escape.”

Chinese proverb

Strategic planning is a series of choices that identify the right course of action, followed by the building and implementing of operating plans necessary to get there. One of the key choices is identifying your playing field. Where and how will you compete?

Certainly, the path of least resistance is to continue to compete in your current arena. But keep in mind that your current position is not immutable. In fact, as part of the planning process, you should actively challenge your current position to make sure you should stay there. The annals of business are full of success stories where companies moved to new playing fields and full of failure stories where other companies stayed in place in the face of growing challenges.

To identify where to compete, you need to answer the following questions:

What geographic markets should you be in?

Who is your target customer?

What products will you sell, and how will you source them?

What channels of distribution will you employ?

As a case study for how to address these four questions, let’s look at the launch of a live entertainment business line within an entertainment company. As part of a broad strategic planning exercise, the parent company had assessed the marketplace and concluded that a significant opportunity existed to launch a new division to move into this adjacent market.

Starting with geography, the company decided that the East Coast region was the right target. The team identified a material customer concentration there that would make marketing efficient. Additionally, the parent company headquarters was nearby, easing the logistical burden.

The target customer was anticipated to be a subset of the parent company customer base – higher income and younger than the average, but the parent company pool would allow the startup to establish a beachhead. The target market’s income would support high average ticket prices. As with geography, the company made hard choices that would shrink the size of the target market by income bracket but more than offset that by marketing efficiencies gained from focusing on a specific, smaller segment.

The product was clearly identified as a luxury entertainment experience with exceptional customer service. As a result of the high-end offering, premium pricing would be required – but as with the choices above, the benefits of focusing the product offering would offset the smaller pool of target customers.

Last, distribution for the new business was chosen to be on cruise ships. Certainly, land-based events presented much larger revenue opportunities, but the focus on exceptional customer service led to a difficult choice to launch with cruise ship offerings. The experience on a ship could be more easily controlled with a relatively manageable and captive audience of 2,000 guests. Also, the venue would allow the startup to work out operational issues and build a continuous improvement model to perfect the offering.

Results

The testing phase for the new business went very well, and within three years, the new business was a major revenue and profit contributor to the parent company with exceptional long-term growth opportunities. Within five years, it was a top-three player in the marketplace.

Overall it was a terrific success driven by a tight focus on where to compete. By identifying key opportunities and consciously choosing not to pursue some potentially lucrative alternatives, the startup built a strong brand and quickly won market share from competitors. The new business did not choose to be everything to everyone and thus quickly built a formidable operation with solid growth potential and significant enterprise value.

By answering the four “where to compete” questions, you can put your organization in position to take market share from competitors and build a sustainable value model.

Capture Your Future is a series of articles bringing you practical insights gleaned from over 20 years of building strategic plans for divisions of big public companies, medium-size privately held companies, and nonprofit organizations. Along the way we’ll share some lessons we’ve learned from doing the right things, and sometimes the wrong things, in building good strategic plans.

]]>Wondering how to accelerate your growth?https://navigareadvisorypartners.com/nap-blog/2017/08/wondering-how-to-accelerate-your-growth
Fri, 04 Aug 2017 17:53:07 +0000http://navigare.wpengine.com/?p=869Often times the hardest thing for the entrepreneur to do is to work on the business when they are busy working in the business. As businesses grow, entrepreneurs must shift their focus from creating a successful business model to leveraging the model for sustainable value. Navigare Advisory Partners brings experience and tailored insight to owners […]

]]>Often times the hardest thing for the entrepreneur to do is to work on the business when they are busy working in the business. As businesses grow, entrepreneurs must shift their focus from creating a successful business model to leveraging the model for sustainable value.

Navigare Advisory Partners brings experience and tailored insight to owners and executives looking to take the next step with their businesses. Our practical experience and expertise in strategic planning, organization and operational improvement, and corporate development, and our exceptional customer service, guides our clients to sustainable value.

“Unlocking Your Core Capabilities” is the fifth in a series of articles about building a high-impact roadmap for the future of your company.

Your core capabilities provide the foundation for your success. In fact, they are what drive your success and, if well understood, will help guide your decisions about where to go next. Investing in and leveraging your core capabilities will help maximize your return on investment and improve your odds of success as you launch new product lines or distribution channels.

“It is not enough to be busy. So are the ants. The question is: What are we busy about?”Henry David Thoreau

An excellent question from the 1800s that still applies today – what are we busy about? The business world is rife with challenges and disruptive change but also with endless possibilities brought on by lower barriers to entry via technological advances and easy avenues of direct conversation with customers via digital/social media.

To unlock the biggest opportunities for growth, you need to truly understand your situation and have an honest assessment of what is fundamentally driving your success.

The first step is to create or update your SWOT analysis. This is a good team-building activity because it gets planning team members to give some serious thought inside and outside your four walls and starts to crystallize understanding of your current state and major challenges.

Be sure to spend enough time to identify the three to five key items in each quadrant. Once you are done, you will have a roadmap for things to build upon, vulnerabilities you need to fix. Everyone will leave your SWOT analysis with a common understanding of where you are as a company.

Next, it’s time to uncover your core capabilities. The strengths you just identified are a great starting point. Identifying core capabilities takes things one important step further: Most companies have a number of strengths, but an honest assessment will show that only a few actually drive their success and position you for future growth.

Core capabilities are your strategic differentiators, what give you a competitive edge. They create the reason to buy from you instead of your competitors. Competitors find them hard to replicate; they fundamentally make you who you are. They also complement one another, fit together, and reinforce one another. They are the foundation for your success.

Why is identifying core capabilities so critical? Because it sets the stage for the ultimate goal of the strategic planning process: identifying your best strategic options. You will greatly increase your chances for success if you build new revenue streams from the foundation of things you’re already very good at and exploit those things that make you better than your competitors.

How do you identify your core capabilities? Start by brainstorming. Tell your team that you will use the next meeting to identify your core capabilities, define what that means, and ask them to give some thought to the question.

When you get together, record each suggestion on a Post-It note on the wall. No discussion or debate yet; this is the fun, “everyone participates” part. Remember that each person in the planning process is there because of his or her special perspective, and therefore all opinions need to be heard. Call on anyone who’s reluctant to share; this is a good reason to use a facilitator who will manage the logistics and meeting room dynamics, freeing you to be 100 percent present in the discussion.

Once all suggestions are on the wall, start grouping similar concepts to narrow your focus. You don’t need perfect matches, just concepts that express the idea. That should narrow the options to a manageable few. Summarize each grouping with a headline, then get to work challenging each. Does it meet the test of being a true strategic differentiator? Does it drive customers’ buy decision? Is it hard for competitors to replicate? Often by challenging the headline, you can uncover the real core capability.

Ultimately you are seeking to unlock three to four key capabilities. Very few companies legitimately have more. Remember, these are not the things you’re good at; they are the things so important to your customers as to drive them to buy from you and that your competitors would have a hard time replicating.

Case Study: A few years ago during a planning session, we were building out core competencies for a division of a mid-market company. Many in the room were arguing that the brand was a core competency, and while it did meet the test of being hard to replicate by competitors, it didn’t really meet the other tests. By pushing on the headline repeatedly, we uncovered that the real core competency was the company’s ability to leverage the brand and build emotional connections with customers. The use of the brand was limited by some external restrictions, and if the team had stopped at the initial assessment, no value would have been uncovered. Digging further and unlocking the real core capability led to two new product lines under different brands that materially increased revenue for the company. The new brands leveraged the core capability of building emotional connections in a way that simply trying to build on the current brand never would have.

That leads to the most important outcome of identifying your core capabilities – invest in them! Once you unlock the keys to your long-term success, focus your efforts on maximizing their use. You have identified the small number of key building blocks of your success, and your plans will be much more likely to succeed if you invest in and leverage them aggressively.

Capture Your Future is a series of articles bringing you practical insights gleaned from over 20 years’ building strategic plans for divisions of big public companies, medium-size privately held companies, and nonprofit organizations. Along the way we’ll share some lessons we’ve learned from doing the right things, and sometimes the wrong things, in building good strategic plans.

]]>An Industry First Solutionhttps://navigareadvisorypartners.com/case-study/2017/06/industry-first-solution
Thu, 29 Jun 2017 14:40:20 +0000https://nap.lwsllchost.com/?p=699There comes a time when it becomes necessary for a business to re-invent itself. The reasons for this can be many; some are complicated, some not so much. Notwithstanding, it is not enough for an organization to recognize and accurately define the root cause of this change requirement. The organization must act upon its recognition […]

]]>There comes a time when it becomes necessary for a business to re-invent itself. The reasons for this can be many; some are complicated, some not so much. Notwithstanding, it is not enough for an organization to recognize and accurately define the root cause of this change requirement. The organization must act upon its recognition with a strategically devised plan. The failure of an organization to do so can have devastating consequences.

Situation and ComplicationA public company (the “Parent”), serving travelers and guests around the world, identified a segment of its industry not well represented within its customer portfolio. Rather than developing this line of business organically, the Parent opted to do so via acquisition. A target company was identified and acquired (the “Subsidiary”).

Post-acquisition, the business model of the Subsidiary was no longer sustainable. Increasing overhead and declining margins rendered the Subsidiary non-viable long-term. Faced with the reality of a failing business model, and the risk of losing the benefits of the acquisition, the Parent reached out for help assembling a team to find a solution.

The Assessment: Identifying the Issue

Led by a Navigare Principal, each member of the team was directed to study, on their own, the basic operating principals and strategy of the Subsidiary, and subsequently gathered as a group to discuss their findings. Upon doing so, a realization struck them.

The Subsidiary managed all markets in which it operated. The risk associated with these operations fell squarely upon it. Furthermore, it was a low overhead, lean operation keenly focused on effective fiscal management to maintain its otherwise precarious margins. The Parent, on the other hand, was a well-oiled, international enterprise, with significant resources and multiple business units. Its other subsidiaries were franchisors and management companies, capable of absorbing costs allocated to them by the Parent, or passing them through to their clients, The Subsidiary now found itself a recipient of these allocations from the Parents, further reducing the already slim margins.

The Solution: An Industry FirstThe following months were spent interviewing Parent and Subsidiary management, operations, sales, and finance staff. Deliberation, modeling and strategic thought lead to the final solution. The Subsidiary could no longer operate markets within which it operated. Rather, it was necessary to find third parties to do so and with that, an industry first franchise model concept was born.

The plan was put in place. The team would split into multiple groups. One was focused on proving the acceptance of the concept by potential purchasers of the franchises, and another was assigned the task of designing the franchise model itself, yet another was charged with drafting all federal and other related documents necessary for the approval of a franchise system, while another team was assembled to develop the sales strategy needed to support the system. And lastly, a team was charged with developing a sales and marketing platform for the sale of the franchises themselves.

After several months, the system was developed and the implementation plan put in place. The entire business model of the Subsidiary was transformed. The Subsidiary would now provide the same service it did before the acquisition, albeit it as a management company and franchisor.

Outcome
The creation of an industry first franchise system was an overwhelming success. Franchise opportunities sold-out in half of the budgeted timeframe, the Subsidiary expanded to 45 markets across the country, and a revenue stream of more than $50MM was created for the Parent.

The acute assessment of the underlying issue, the creation of a solution to solve the underlying problem, and the effective implementation of the plan lead to the creation of sustainable business for both the Parent and Subsidiary.

]]>Technology Value Propositionhttps://navigareadvisorypartners.com/case-study/2017/06/technology-value-proposition
Thu, 29 Jun 2017 13:21:41 +0000https://nap.lwsllchost.com/?p=695By focusing on the vital few elements of its value proposition, an established technology company was returned to sustainable, profitable growth. A well-established technology company had hit a soft-spot in its growth trajectory – with poor profitability and weak cash flow following closely behind. Though not at crisis levels, the company needed to quickly reassess its […]

]]>By focusing on the vital few elements of its value proposition, an established technology company was returned to sustainable, profitable growth.

A well-established technology company had hit a soft-spot in its growth trajectory – with poor profitability and weak cash flow following closely behind. Though not at crisis levels, the company needed to quickly reassess its position, to define the factors behind the decline in performance, and to develop a path to sustainable growth. We worked directly with CEO, CFO, and Business Unit Heads to navigate the challenge by strategically evaluating and prioritizing the most promising service offerings, market segments, and clients. With that clarity, we could organize the company around the activities that provided the most value to the firm’s customers and the best return on investment for scarce capital.

Our approach centered on a quick diagnostic of contribution margins by product, by customer segment, and by market segment which identified where the sales weakness was coming from and (while another of our teams worked simultaneously with sales, marketing, and operations to address the value proposition refresh) the strategy team illustrated the segments of the company that were working well – and the would grow even faster when resources were freed-up from persistently lagging areas.

Approach
The team could use existing data within the company’s reporting systems to break down profitability and contribution margin to the product level (Product Line Profitability). This was a new view for management and proved a catalyst for fundamental change. This also allowed Management to see how and where profits resided – and with the stark challenge from some legacy product offerings and long-term ‘house accounts’ which were actually running at a loss (when fully burdened with appropriate cost).

Result
Top-line growth improved from zero to 10%+ within a year. Margins, ROI, and ROE were also impacted to such an extent that the firm could opportunistically refinance its debt facilities and to raise growth equity investments.

]]>Post-Merger Integrationhttps://navigareadvisorypartners.com/case-study/2017/06/post-merger-integration
Fri, 23 Jun 2017 19:09:15 +0000https://nap.lwsllchost.com/?p=601Too many mergers fail to fully realize all of the identified deal value; too often the shortfall is a result of failed integration efforts. Post-Merger Integration is critical part of any M&A activity and it’s frequently relegated to post closing as an afterthought or neglected completely. Starting the PMI process early in the deal life […]

]]>Too many mergers fail to fully realize all of the identified deal value; too often the shortfall is a result of failed integration efforts. Post-Merger Integration is critical part of any M&A activity and it’s frequently relegated to post closing as an afterthought or neglected completely. Starting the PMI process early in the deal life cycle with the right participants and committed leadership greatly improves the chances of success.

Situation and ComplicationA private equity group acquired 2 mid-market direct to consumer businesses. Overhead and operational cost savings were the major drivers behind the deal and therefore a successful integration was a critical driver of realizing deal value.

On the surface, the 2 entities were similar with a roughly equal revenue base and high anticipated customer overlap. Facilities could be consolidated to eliminate fixed costs and back office functions like human resources and accounting could be combined to reduce overhead.

While the high-level view was positive, a closer look revealed some significant challenges – the product lines had more differences than similarities. The diversity of product characteristics would create process challenges. Overlapping seasonality added complexity and presented staffing challenges.

Integration would be complicated with high implementation risk. Failure to smoothly integrate while maintaining high customer satisfaction would threaten current and future revenue performance.

ApproachLed by a Navigare Principal, planning for the post-merger world was initiated well before deal was finalized with key personnel on both sides meeting regularly to agree on process and key success drivers as well as perform rigorous assessment of integration challenges. Early on, the team stressed the importance and magnitude of the effort and the need for focused implementation drivers. By coordinating efforts up front, the teams would hit the ground running once the deal closed.

The implementation team worked first to prioritize efforts to get critical early wins – easy projects with material cost savings or projects with large cultural impact. Critical to the success of the project was setting clearly defined benchmarks, tracking and weekly reporting on progress.

When individual milestones were not met, the team focus wasn’t on pointing fingers but on how to get the project on track. Blame and behavior correction was saved for one on one meetings behind closed doors. Group focus was on getting results.

OutcomeStarting the integration process well before closing with a team separate from the deal team and focusing on early wins and culture drivers was a big success. The complex integration project was accomplished ahead of schedule and under budget. Customer satisfaction performance measures were met or exceeded. The combined organization realized a 40% reduction in headcount and delivered $20MM in fixed cost reduction.

]]>Board Level Planninghttps://navigareadvisorypartners.com/case-study/2017/06/board-level-planning
Fri, 23 Jun 2017 19:08:06 +0000https://nap.lwsllchost.com/?p=600Boards are often sources of insight and innovation needed for organizations to thrive but sometimes Boards are made up by members who have trouble identifying new opportunities for future growth. Focused leadership and external advice is needed to help find the model for long term success and gain Board approval for needed changes. Situation and […]

]]>Boards are often sources of insight and innovation needed for organizations to thrive but sometimes Boards are made up by members who have trouble identifying new opportunities for future growth. Focused leadership and external advice is needed to help find the model for long term success and gain Board approval for needed changes.

Situation and ComplicationA 30-year-old not for profit trade association was facing an uncertain future. Membership revenue was declining driven by falling member numbers and lower spending per member. While still well above breakeven, the revenue trend portended financial trouble in 3-5 years.

Underlying the downturn were two fundamental issues. First, the member organizations were rooted in an increasingly outdated business model and slow to adopt new technology and marketing techniques needed to successfully compete in an increasingly digital world. Second, the focus of the association was also firmly fixed in the old world and board members, made up of the very leaders who needed to change, had trouble identifying and articulating a new vision for the future.

Without a shift in focus or new business model, the trade association would almost certainly face irrelevance and ultimately face financial distress.

ApproachWorking with the leader of the association, a Navigare principal (and member of the Board’s Executive Committee), developed a plan to fully assess the current situation, establish a solid picture for the likely future and produce multiple strategic alternatives for consideration by the full Board of Directors.

External resources were engaged to build a comprehensive member survey and conduct a series of interviews with key members to develop deeper insights into current issues and outlook for the future.

Simultaneously, brainstorming sessions with engaged members were held to build a list of opportunities which were then filtered to establish a short list of potentially viable solutions. Each of the short list options were discussed and modeled to assess likelihood of success in a series of intensive reviews.

At the end of the process, 3 viable options were presented to the Board with a recommendation for creating a partnership with key market competitor that was more firmly established in the digital market but whose members would benefit from the experience the association brought from the traditional marketplace.

OutcomeThe Board approved the recommendation and the strategic partnership was established. Cross-pollination of the 2 member groups helped each of the partners to build revenue and the long-term prospects for the once troubled association were significantly improved. As an outgrowth of the strategic assessment, the organizational structure was streamlined and material cost savings were realized further enhancing the financial outlook.

]]>International Expansionhttps://navigareadvisorypartners.com/case-study/2017/06/international-expansion
Fri, 23 Jun 2017 19:07:28 +0000https://nap.lwsllchost.com/?p=599International expansion is a viable strategy for companies seeking to grow their businesses. It’s a strategy for diversification, for servicing new and existing clients, and for achieving sustainable financial growth. Before venturing into these new markets, a business must do its homework, including understanding the people and the culture of the targeted markets, the legal […]

]]>International expansion is a viable strategy for companies seeking to grow their businesses. It’s a strategy for diversification, for servicing new and existing clients, and for achieving sustainable financial growth. Before venturing into these new markets, a business must do its homework, including understanding the people and the culture of the targeted markets, the legal and tax implications of operating in a foreign country, and the likelihood of success of the intended product and service offerings.

Situation and Complication
The principals of a nationally respected professional services provider recognized the advantages of expanding its business overseas and made the decision to proceed. But first they enlisted the assistance of a Navigare partner to lead the process. From the beginning, the Navigare partner insisted the company must commit to being a good corporate citizen, one that conducts itself in strict compliance with local laws and business regulations, and who, along with its team members, immerses itself in the culture of its host country.

ApproachA strategic expansion plan was developed by a team consisting of company leadership and the Navigare principal, who was als0 responsible for the execution of the plan.

After much research and deliberation, it was decided the initial step of the expansion would be via acquisition. Upon identifying the best market for the initial entry, the optimal target was identified. Within a short period of time the Navigare partner negotiated a transaction substantially less than the parameters approved by the company, conducted diligence, and orchestrated a successful integration. This acquisition would serve as the foundation upon which all future global expansion would be based.

Post-acquisition efforts focused on entering additional foreign markets. Over the next 18 months, the company established foreign entities in five additional markets. For each such expansion, the Navigare partner identified market specific professionals to counsel the company, a critical component of all global expansion efforts. These professionals included lawyers, accountants, human resource professionals, as well as cultural consultants who provided vital information to company leadership and team members.

OutcomeFast forward three years and the company is now known as the standard bearer of excellence throughout its international markets. This is a direct result of a well devised strategy, an efficient and effective execution of that strategy, a commitment to doing business the right way, and the Navigare partner who was committed to the goal of sustainable value creation for the company.

]]>A Navigare principal-led effort supported an already successful middle market firm to extend the Company’s reach into Europe through design and execution of a robust corporate development function capable of effectively managing complex, cross-border M&A transactions. Importantly, the Company was able to pursue – and capture – value-accretive growth opportunities without material disruption to the valuable underlying operations of their business. And while a Navigare principal played an integral role working shoulder-to-shoulder with executive management and ‘on-the-ground’ deal teams to design and execute the new M&A program, the Company continues to be a robust acquirer after the initial engagement with only limited Navigare support.

Already a leader in its relevant domestic market segments, the Company felt there was compelling logic to a growth strategy through establishment of a European beachhead for further expansion. A Navigare principal worked closely with the Company’s management to formulate and define a robust corporate development function – from opportunity identification to efficient initial evaluation and screening, from due diligence to deal structuring and negotiation, from post-merger integration planning to a prioritized 100-day plan implementation. Beyond the program design, the Navigare principal was hands-on in the execution across the entire corporate development process. This allowed key Company resources and staff to be used efficiently and effectively while maintaining the day-to-day core business functions of the company without undue interruption.

Approach
Following a detailed strategic assessment of the company overall, we were able to articulate an aligned M&A strategy that allowed the Company to effectively evaluate the customers, capabilities, and geographies that were most attractive for acquisition. The Company energetically launched the actively-engaged, strategy-linked approach corporate development process to search, screen, capture, and integrate three highly-attractive, highly-accretive assets within nine months. Though often complex, the strategy-focused, cross-border transactions brought immediate benefits to key stakeholders: from shareholders, to customers, to employees – and has allowed the Company to continue its profitable, value-accretive international expansion plans – both organically and through tuck-in follow-on M&A opportunities.

Outcome
The success of the M&A program was derived from the exemplary execution across the most crucial elements of the M&A process, ever mindful of the Company’s core strategy and focused on meaningful, sustainable value creation:

Value Identification – Although the Company had undertaken smaller, opportunistic domestic acquisitions historically, the new strategy-linked corporate development platform allowed the nationally-recognized company to seize opportunities to build out its capabilities, customers, and geographic reach years ahead of plan. Building on that success – and the dynamic needs of its customers – the Company’s strategic plan continues to lucidly envision further global expansion so the cross-border targets fit squarely into a fact-based, clearly-articulated acquisition strategy readily supported by debt and equity capital providers. The clear, compelling deal theses also allowed for expedited decision-making process and to effectively engage the acquired companies in strategic discussions early in the post-merger implementation planning.

Value capture – Good companies are not necessarily good M&A investments – any successful strategic deal has to be struck at the right price and structured to preserve value for both Seller and Buyer (especially where the former will continue to be economic contributors post-close). In successful deals, from LOI discussions to deal structuring, from due diligence investigations to integration planning, the Company’s deal teams are able to focus on preserving the best of both entities through thoughtful alignment of economic interests, opportunities for upside participation, and careful attention to cultural and personnel considerations.

Value realization – With integration planning appropriately starting before the deal was closed, the integration program gained immediate traction and showed all the earmarks of success from Day One. Clearly-defined, prioritized action items focused on key areas highlighted by the original deal thesis that preserved the deals’ fine balance between allowing the acquired asset room to grow and innovate while allowing the accretive revenue and cost synergies articulated in the deal model to be achieved well ahead of schedule.

The Company’s commitment to its continual development of integrated M&A capabilities allowed it to efficiently evaluate and successfully execute on opportunities directly in line with its corporate strategy. The rigor of the process – even in the face of complexities of a crossborder deal-making – allowed both acquirer and the acquired entities to over-achieve on desired strategic outcomes of customer-focused, profitable growth.